Question

1. What is the difference between legal and equitable remedies?
A buyer contracts to buy a 1941 four-door Cadillac convertible from a seller for $75,000. The seller, having found a third party who will pay $85,000 for the car, refuses to sell to the buyer. What is the buyer’s remedy? Assume the third party had paid the $85,000 and the seller was ordered to sell to the buyer. What is the third party’s remedy?
Professor Smith contracts to teach business law at State University for the academic year. After the first term is over, she quits. Can State University get an order of specific performance or an injunction requiring Professor Smith to return for the second term? Now suppose that the reason Professor Smith quit work at State University is because she got a better job at Central University, fifteen miles away. Can State University get an injunction prohibiting her from teaching at Central University?

Answer 1

1.a) Remedy is a form of compensation offered to a person either through legal process or through out of court mutual settlement. There are two types of remedy i.e., legal remedy and equitable remedy. Legal remedy is monetary compensation to the aggrieved party by other party after legal proceedings. The monetary compensation under legal remedy includes repair costs of buildings such as home or office, wage overdues, salary arrears etc.

Equitable remedy is non monetary compensation offered to an individual by other, both of whom are involved in a contract. It is an out of court settlement by involved parties to resolve the contract disputes.

Equitable remedy applies in the situation such as contract renewal when old contract that was breached by one party now expires. In that scenario, both parties may sign a new contract agreement to sort out their disputes.

Another case where equitable remey can be applied is injunction when in a court proceeding it is established that violating certain terms of the contract by one party will cause heavy damages to other party that cannot be compensation even with monetary compensation.

b) If buyers buys 1941 four-door Cadillac convertible from the sellers for $75,000 and seller fails to oblige the contract with the buyers, then buyer may seek the entire cost of the sold car as a legal remedy from the court if the buyer has to invest at least $75,000 amount to purchase another car of same model.

If the third party agrees to pay $85,000 for the 1941 four-door Cadillac Convertible to the seller, then the legal remedy of the third party is $85,000 plus fines because if the seller had filed a case in the court asking compensation from the third party then court would have ordered the third party to pay the seller the entire amount of the car plus applicable fines.

State University can get injunction court order if it is established in the court that quitting job by Professor Smith before contract period will cause extensive damage to studies in the University and which cannot be compensated by monetary fund.

Even if Professor Smith quits job in State University to join a better job at Central University, State University can be granted injunction order to prevent Mr. Smith from quitting the job before contract term.